Dear Shareholders,

"Enduring value is rarely created by chance; it is built step by step with clarity of purpose and discipline in execution." This thought captures how Sarda Energy & Minerals Limited has approached its evolution over the past several years. The ethos, founding principles and core identity of this organisation has not changed over time. What has changed, deliberately and steadily, is the shape of the business itself, moving from a metals-led enterprise into an integrated energy, mining and metals business, that is structurally stronger, more resilient and better positioned to capture opportunities across sectors that will define India's next phase of growth.

Over the five years leading up to FY 2025-26, this transformation has translated into revenue compounding at approximately 20% annually and EBITDA at close to 25%, a trajectory that reflects sustained discipline rather than the outcome of any single favourable year.

We are living through what may be the most consequential structural shift the global economy has witnessed in decades. Three forces, the energy transition, the reconfiguration of global supply chains and the rapid rise of artificial intelligence, are converging at once, and together they are redrawing the map of industrial demand. Global electricity consumption tied to data centres and AI infrastructure is projected by several international agencies to more than double by the early part of the next decade. Countries and companies that can offer secure, affordable and reliable energy, along with dependable access to critical minerals, will increasingly find themselves at the centre of this new economic order. It is within this global context that we must understand the choices Sarda has made and continues to make.

Across the world, energy systems are being redesigned. The shift toward renewable sources continues, even as thermal retains a critical role in ensuring grid stability and round-the-clock supply. Nations are simultaneously seeking to reduce dependence on imported fuel and critical minerals, recognising that energy security is no longer a peripheral concern but a matter of national resilience. At the same time, artificial intelligence, once a niche technological pursuit, has become a driver of extraordinary demand for computing infrastructure, data centres and, consequently, electricity. This reordering of priorities has been accelerated by geopolitical tensions in various parts of the world, which have disrupted established supply routes and pushed governments toward greater self-reliance in energy, metals and industrial inputs. The businesses that will benefit most from this shift are those with the foresight to build capacity ahead of demand, and the financial discipline to do so without compromising their balance sheets.

Amid this global recalibration, India’s position stands out with remarkable clarity. The country’s manufacturing renaissance, its ambitious infrastructure build-out, and its growing participation in the global electronics and semiconductor ecosystem are converging to create a scale of energy demand that India has rarely seen before. In May 2026, India’s power grid recorded a fresh all-time high peak demand of 270.8 GW, comfortably surpassing the previous high of 250 GW recorded in 2024, while the country’s crude steel production grew by more than 11%, even as several established global markets, including China, recorded a contraction. Government initiatives aimed at strengthening domestic manufacturing and reducing reliance on imports, guided by the broader vision of a self-reliant and developed nation by 2047, are reinforcing this momentum at every level of the economy.

It is this confidence in India’s trajectory that gives us the conviction to scale further. We do not view our growth in isolation. We see it as intertwined with the nation’s own journey towards energy security, industrial self-sufficiency and sustainable development. Every additional megawatt of capacity we build, every tonne of resource we secure responsibly, and every improvement we make in our operating efficiency is, in a modest but meaningful way, a contribution to that larger national purpose.

The year under review gave us another opportunity to test the strength of the integrated model we have built. While the external environment evolved rapidly and tested businesses with challenges that few could have anticipated even a year earlier, our ability to grow sustainably was, if anything, reinforced during a volatile period. This resilience came from remaining true to our deep-rooted values, our entrepreneurial spirit and the enduring trust placed in us by every stakeholder connected to this organisation.

We continued to invest in long-term assets while maintaining a conservative financial profile, understanding that the businesses which endure through cycles are those that never let ambition outrun prudence. The Hon’ble Supreme Court’s final judgment affirming our acquisition of SKS Power strengthened the foundation for our next phase of growth. During the year, we integrated new capacities into our operations, enhanced our resource base across geographies, and recorded our highest-ever production across several key business segments. At the same time, we remained committed to safety, to the strength of our community relationships, and to the soundness of our governance practices, recognising that these are not peripheral commitments but the very scaffolding on which long-term credibility is built.

As I look ahead, I draw considerable confidence from the enduring strengths that define this organisation: a committed workforce that has stayed the course through a period of significant transformation, a trusted market reputation built over decades, and long-standing relationships with customers, suppliers, lenders and the communities in which we operate. Together, these relationships continue to strengthen Sarda’s position as a dependable partner in India’s energy and metals value chain, even as we expand our footprint and open new avenues for sustainable growth.

Over time, our operating base has come to rest on three interlinked pillars, each reinforcing the others. The first is a strong presence in power generation across thermal and hydro sources, a segment that today contributes the largest share of our consolidated earnings, a meaningful shift from a decade ago when the business was almost entirely dependent on metals for its profitability.

The integration of our large thermal power asset in Raigarh, Chhattisgarh, together with our captive solar initiative and our hydropower projects, has made electricity a central driver of earnings for the organisation. Long-term power purchase agreements, fuel supply contracts and established grid connectivity have together given us far better visibility on cash flows and a more predictable earnings profile than we had in earlier years, when the business was more exposed to the swings of commodity cycles.

Supporting this power portfolio is a growing resource base. Our coal mining operations, both within India and abroad, together with our iron ore mine in Chhattisgarh, provide the fuel and raw material linkages that underpin both power generation and downstream manufacturing. By aligning the development of these mining assets with generation capacity and plant requirements, we are building a more self-reliant and efficient operating model. This resource backbone is not about volume for its own sake. It is about security of supply, consistency of quality and long-term cost competitiveness, qualities that matter far more over a full economic cycle than any single quarter’s output.

The third pillar is our metals business, which remains an important part of Sarda’s identity and the segment through which many stakeholders first came to know this organisation. Our steel and ferro-alloys operations continue to deliver steady performance and have achieved some of their highest-ever levels of output across several product categories during the year. With planned expansion in our pellet-making capacity now underway, we are strengthening the value-added part of this chain further. What is genuinely different today, compared with even a few years ago, is that these manufacturing activities are increasingly supported by our own power and our own raw materials. This integration, more than any external market condition, is the real source of resilience in our business.

We remain deeply invested in sustainability, safety and corporate social responsibility, recognising that our long-term success is closely linked to the well-being of the environment and the communities around us. Across our operations, we continue to focus on efficient energy use, responsible resource management and a steady reduction in our environmental footprint. The growing share of hydropower, solar and waste heat generation in our portfolio, together with efforts to improve efficiency in thermal generation and coal washing, reflects our commitment to a more balanced and sustainable energy mix. Vertical integration between mines, plants and power units helps optimise logistics and resource utilisation, further contributing to lower emissions and stronger overall performance.

Corporate social responsibility is integral to our identity and not merely a matter of compliance. During the year, our CSR initiatives spanned healthcare, education, livelihoods, infrastructure and sports, reaching a wide cross-section of beneficiaries in the regions where we operate. Programmes such as physiotherapy and health camps, support for cancer screening, career counselling in village schools, livelihood development projects for farming families and youth engagement through sports have all contributed to tangible improvements in quality of life. For us, these initiatives express a simple conviction: that progress must be shared, and that creating long-term value for communities matters as much as creating value for shareholders.

This same sense of responsibility extends to how we govern the Company. Our Board brings together experienced professionals and independent directors with diverse expertise across industry, finance, energy and public administration, ensuring that every important decision benefits from both strategic perspective and independent judgement. Through its Audit, Risk Management, CSR and Nomination & Remuneration Committees, the Board provides active oversight, constructive guidance and disciplined evaluation of our strategic priorities and risk landscape. Regular Board evaluations, structured director induction programmes and robust internal controls, together with clear policies on related party transactions and ethical conduct, reinforce a culture where transparency and accountability remain fundamental to the way we operate.

Over the past few years, we have built a stronger foundation, aligned our businesses more closely and created new avenues for growth across energy, resources and manufacturing. This progress is reflected in the five-fold expansion of our energy capacity, alongside the significant scale-up of our coal mining and manufacturing operations. But our journey is just the beginning. As global energy demand continues its structural rise, driven by the twin forces of industrialisation and digitalisation, and as India continues its own march toward greater self-reliance in energy and manufacturing, I believe Sarda is well positioned to play a meaningful role in this story. Our ambitions for the years ahead are shaped by this belief. We intend to continue investing in people, in technology and in the relationships that have sustained this organisation through every phase of its growth, ensuring that we scale responsibly and translate our integrated strengths into value that endures well beyond any single financial year.

As we look towards 2030, we aim to double our energy capacity, quadruple our mining capacity, expand our manufacturing footprint, and drive profitable, sustainable growth while maintaining a robust balance sheet. Reflecting our confidence in the Company’s direction, the Board has recommended a dividend of ₹ 2 per equity share, representing 200% dividend payout for FY 2025-26, the highest in the Company’s history, subject to shareholders’ approval.

I would like to place on record my sincere appreciation to our shareholders, employees, customers, lenders, advisors, communities and every other stakeholder who has extended their unstinting support to this organisation. Your confidence has allowed us to pursue this transformation with genuine conviction, even though periods of considerable global uncertainty. I remain confident that, with your continued support, we will keep scaling this organisation thoughtfully and creating enduring value for generations to come.